Bagholder

The term bagholder is an informal slang term used in U.S. financial markets to refer to the shareholders left holding shares of worthless stocks. [cite web|title=Stockholders, Stakeholders, and Bagholders|url=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=149731|author=Richard Booth, University of Maryland School of Law|publisher=Social Science Research Network|date=1997-11-01|accessdate=2006-12-03]

The shareholders could be caught up in a corporate bankruptcy and accounting scandal, as was the case with Enron and Worldcom, or the victims of a pump and dump scheme, in which naive and unsophisticated investors fall victim to e-mail spam, rigged stock tip forums, or other tricks used by stock touts to drive up the shares of worthless penny stocks.

The term has also been applied as a term of derision to real estate investors. [ [http://www.fool.com/investing/general/2007/08/08/still-more-housing-bull.aspx "Still More Housing Bull," by Seth Jayson, The Motley Fool, Aug. 8, 2007] ]

The word is derived by combining shareholder with the expression "left holding the bag."

Holding the Bag

The expression "left holding the bag" originated in eighteenth century Britain and spread throughout the English-speaking world. [cite web|title=Q&A Left Holding the Bag|url=http://www.worldwidewords.org/qa/qa-lef1.htm|publisher=World Wide Words|date=2002-11-30|accessdate=2006-12-03] In this context, a person left holding the bag is stuck with the stolen goods, taking the blame from the police while the rest of a criminal gang escapes.

External links

* [http://www.bartleby.com/59/4/leftholdingt.html Holding the Bag] on Bartleby

References

ee also

* Greater fool theory